An open economy presents the following data. The intercept of the consumption function is 4700. The marginal propensity to save (MPS) is 0.20. There are no tax collections in this economy. Government expenditure is 10,000. Autonomous investment is 6,000. The marginal propensity to invest is 0.12. Autonomous exports are 5,000. Autonomous imports are 3,000. The marginal propensity to import is 0.1. Using this information, answer the following four parts. Calculate the equilibrium level of GDP. Calculate the multiplier in this economy. Now suppose that the MPS changes to 0.15. Calculate the new multiplier in this economy. Given the change in the MPS to 0.15, calculate the new equilibrium level of GDP
An open economy presents the following data.
The intercept of the consumption function is 4700.
The marginal propensity to save (MPS) is 0.20.
There are no tax collections in this economy.
Government expenditure is 10,000.
Autonomous investment is 6,000.
The marginal propensity to invest is 0.12.
Autonomous exports are 5,000.
Autonomous imports are 3,000.
The marginal propensity to import is 0.1.
Using this information, answer the following four parts.
Calculate the equilibrium level of
Calculate the multiplier in this economy.
Now suppose that the MPS changes to 0.15. Calculate the new multiplier in this economy.
Given the change in the MPS to 0.15, calculate the new equilibrium level of GDP
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